Pajak

24 Oktober 2008

Re: Bls: Fw: [forum-pajak] PPH PS 26

Pak kalo kita ngasih fee ke perusahaan UK kena PPH 26 nggak pak?
Fee nya atas penyediaan tenaga ahli yang bekerja di indonesia.
Kalo tidak kena, boleh saya minta diberikan dasar hukumnya?

Terima kasih ya Pak.

--- Pada Kam, 23/10/08, Ryoma Echizen <diansyah_taxz@yahoo.com> menulis:
Dari: Ryoma Echizen <diansyah_taxz@yahoo.com>
Topik: Re: Bls: Fw: [forum-pajak] PPH PS 26
Kepada: forum-pajak@yahoogroups.com
Tanggal: Kamis, 23 Oktober, 2008, 3:54 PM

Kalo msih dlm time test tidak perlu dipotong pph pasal 26, jika memang ada COD/SKDnya. Coba dibaca lagi tax treaty singapore dan indonesia, penghasilan yg bapak ceritakan termasuk dalam article 7, yaitu business profit, sehingga bukan objek pemotongan pph pasal 26.

Tetapi kalo telah melewati time testnya, akan digolongkan sebagai BUT, sehingga yang akan dipotong pph pasal 23.

--- On Wed, 10/22/08, Hari Widodo <widodo_72@yahoo. com> wrote:

From: Hari Widodo <widodo_72@yahoo. com>

Subject: Re: Bls: Fw: [forum-pajak] PPH PS 26

To: forum-pajak@ yahoogroups. com

Date: Wednesday, October 22, 2008, 11:43 PM

Dear All,

Pak Parlin terimakasih atas pencerahan yang diberikan,tapi saya jadi bingung nih yang benar yang mana, soalnya rekan-rekan yang lain menyarankan tidak memotong PPH 26 karena masih dalam waktu test of time.(untuk SKD kami sudah terima), sekali lagi mohon pencerahannya agar kami tidak salah dalam melakukan pemotongan pajaknya.perlu kami perjelas kembali bahwa orang tersebut di tugaskan oleh perusahaan X dari singapura bukan secara pribadi selama 20 hari bekerja di perusahaan kami.

salam

Widodo

----- Original Message ----

From: Parlin Silitonga <parlinthsilitonga@ yahoo.com>

To: forum-pajak@ yahoogroups. com

Sent: Wednesday, October 22, 2008 1:35:24 PM

Subject: Bls: Fw: [forum-pajak] PPH PS 26

Dear Pak Widodo,

Saya mencoba utk memebrikan sedikit info..

1. Untuk pertanyaan 1)

Perusahaan anda menerima invoice dari Singapore atas jasa konsultan yg peruhsaan anda, mekamisme perpajakannya adalah

- memotong PPh psl 26 sebsar Gross, sebsar 15% karna antara Indonesia - Singapore ada tax treaty-nya, tetapi anda harus minta COD-nya atau indonesia biasa disebut SKD (Surat Keterangan Terdaftar) perusahaan Singapore yg memberikan jasa tsb, kalau tidak ada berarti tarif normal = 20 %

Note : COD = Certificate of Domicile

- Untuk PPN yg biasa disebut PPN JLN (PPN jasa luar negeri) yaitu anda sendiri yg harus bayar sebesar 10% dari Gross melalui SSP. dan SSP tsb bisa dikreditkan untuk SPT PPN Masa berikutnya.

2. Untuk Pertanyaan 2)

Saya kira tidak ad hub dgn pert 1) karena pada pertanyaan 1) org tsb ditugaskan ke Indonesia, bukan bekerja untuk pershaan anda.

Bicara mengenai time test, jika orang asing bekerja pada persh Indonesia dan baru dilihat jangka waktunya.

Demikian penjelasan saya, bila salah tolong teman2 milis koreksi

Salam

Parlin

--- Pada Rab, 22/10/08, rosa-m@nsk.com <rosa-m@nsk.com> menulis:

Dari: rosa-m@nsk.com <rosa-m@nsk.com>

Topik: Fw: [forum-pajak] PPH PS 26

Kepada: forum-pajak@ yahoogroups. com

Tanggal: Rabu, 22 Oktober, 2008, 10:05 AM

Maaf, saya masih agak bingung, bagaimana kalau konsultan itu bekerja di indonesia melebihi time test, dikenakan PPh apa ?

Mohon penjelasannya. Trims.

----- Original Message -----

From: m r

To: forum-pajak@ yahoogroups. com

Cc: widodo_72@yahoo. com

Sent: Wednesday, October 22, 2008 8:46 AM

Subject: Bls: [forum-pajak] PPH PS 26

Dear Pak Widodo,

Karena konsultan tersebut bereada diindonesia dalam jangka waktu test of time (183 hari dalam jangka waktu 12 Bulan jika pekerjaan swasta tapi jika pekerjaan bebas 90 hari) , maka kita tidak kenakan PPh ps 26 tetapi Untuk PPN 10% tetap kita bayarkan dengan mekanisme SSP.

Mungkin ada pendapat yang lain?

Regards,

----- Pesan Asli ----

Dari: Hari Widodo <widodo_72@yahoo. com>

Kepada: forum-pajak@ yahoogroups. com

Terkirim: Selasa, 21 Oktober, 2008 17:27:12

Topik: [forum-pajak] PPH PS 26

Dear All,

Mohon ikut bergabung,mohon maaf kalau cuma baru bisa bertanya.

saya mau tanya nih perusahaan kami ada invoice dari Singapura untuk 1 orang consultant selama 20 hari dan biayanya USd 30,000.00, kita potong pajak PPH PS 26 berapa persen?

mohon pencerahannya.

Terimakasih

Widodo

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[taxchat] Re: Fighting Paralegal Client

Thanks KC

------------------------------------

IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
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Re: [taxchat] Corporate Screening Tool

Wow! I wish I could get my kids to work for me!!

Robert Lukey wrote:

I've been doing taxes since I graduated from college in 1991 (I was a late graduate), have my EA and CPA designations, and I'll bet I wouldn't score very high on your Quickfinder test. Mostly because I would choose the reality answer and not the book answer because of my experience. I've been hiring high school students most tax seasons and train them to do what I need. They get it, grasp it, and by the end of tax season are completing simple 1040 with Schedule A returns that are accurate. The only experienced tax preparers I have hired are my own children who work around their other job schedule to help me with the more advanced returns. I still don't let them sign the returns they finalize.

On Wed, Oct 22, 2008 at 8:02 PM, Marc Enzi <menzi@earthlink.net> wrote:

I am getting some people who want to join my office and claim they are experienced corporate preparers. I have managed to screen many out by speaking to them, but still some know a little and can BS, but have been disappointing when actually doing prep work. I use the Quickfinder 8 hr CPE exam for screening Individual Tax Prep newhires, but Quickfinder doesn't have one for Corporate 1120/1120S/1065… what do you folks use to quickly determine if the applicant has the skills they claim? I want an objective standard like the 1040 open book Quickfinder 40 question test.

I often get "experienced" preparers who with the Quickfinder and an hour score a 30%, which saves me a lot of trouble and time interviewing people who aren't qualified.I am searching for a similar ascertainable standard for Corporate, does anyone have any suggestions?

Thanks,

Marc

__._,_.___

IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.

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Re: [taxchat] Re: LLC or S or C-Corp

My mistake - it is a Sch C we file -

----- Original Message -----

From: Debbie Breedlove

To: taxchat@yahoogroups.com

Sent: 10/24/2008 1:32 PM

Subject: Re: [taxchat] Re: LLC or S or C-Corp

"We file a Sch E for the $200K of equipment / vehicles to capture the depreciation expense."

I thought that revenue from rental of personal property (equipment) goes to Sch C, not E, and is subject to SE tax. Is that not true?

Anyway, here in the Land of Oz, it costs $165 to set up an LLC with the SOS, and a one-page annual report is filed, along with a $55 annual fee. It's pretty simple and not very expensive. I just explain that I'm not an attorney, but I can tell them the tax ramifications of each type of entity. I think that if they are concerned about liability, and don't want to deal with the requirements involved in maintaining an S-Corp, such as minutes, payroll, and a separate tax return, the LLC is fine.

A problem that we constantly face in this area is that there are all these radio and TV ads telling them that they should incorporate, and if they don't incorporate they are paying way too much in taxes. I have to explain to them the rules on reasonable salary, and that they can't get away without paying any SE tax. In the case of a one-owner business with no employees, and all the revenue is a result of that owner's work, they're going to have a tough time convincing the IRS that the revenue isn't earned income. And even if they pay themselves a reasonable salary and save a little SE tax on part of the income, the cost of doing the payroll and the corporate tax return will probably be as much as they saved in SE tax, if not more. But, since they've heard these commercials, and their ex-brother-in-law's father has a neighbor whose barber's son said so, they're convinced that we're not telling them the truth. You know that book "101 Tax Saving Tips That Your Accountant Doesn't Want You to Know" or something like that...as if we wouldn't want to save them money in taxes for some reason.

It also depends a lot on the client, what type of business it is, whether or not they'll have employees, how organized they are, etc. Some people can't handle the extra paperwork, but don't want to pay someone to take care of it for them. Those are also the ones that are less likely to make enough money for it to be worthwhile to incorporate. JMHO.

From: Arnold M. Socol

Sent: Friday, October 24, 2008 10:43 AM

To: taxchat@yahoogroups.com

Subject: Re: [taxchat] Re: LLC or S or C-Corp

I always advise being concerned with the "Liability" first and not the cost, and not the taxes. Obviously the sole proprietor is the easiest and least expensive to setup and maintain, but not good advise for most situations especially where the owner has personal assets that could be needlessly lost in a business law suit. Even when a sole proprietor is ready to accept "limited liability" is the way to go, I keep the assets in the personal name and charge the corp or LLC rent for these assets. Such as a part time landscaper, excavator with nearly $200,000 of equipment/vehicles and less than $50,000 of annual revenues, because he has a full time job with the town. We file a Sch E for the $200k of equipment / vehicles to capture the depreciation expense. We set up an S-Corp that owns nothing and can't lose what it doesn't have and of course there is insurance.

A sole proprietorship I advise is only a temporary stop until the new business can afford and knows it will stay in business for some time to come. I never advise SPs, only as a temporary situations. I explain all of this to the client.

Arnie

----- Original Message -----

From: mjsanders2

To: taxchat@yahoogroups.com

Sent: 10/24/2008 11:22 AM

Subject: [taxchat] Re: LLC or S or C-Corp

Dear Arnie,
In Oklahoma we don't have the same requirement as NYS. I advise new
small businesses to either stay a sole proprietor (based on size) or
go to an LLC with S-Corp election. I was told in a meeting that S-
Corps have to do all the annual meetings, corporate meeting minutes,
etc that C-Corps do. But an LLC does not have that requirement.
Therefore an LLC with S-Corp election gets the preferential tax
treatment without all the required meetings and minutes recording.
The small businesses I have encountered want to operate decision
making wise like a sole proprietor - "I decide". They aren't
interested in having a corporate board of directors or annual
meetings. If they are just an S-Corp, it leaves them open for the IRS
to disallow their S-Corp status on the basis of not having the
corporate board of directors, meetings, etc.
Janet

--- In taxchat@yahoogroups.com, "Arnold M. Socol" <waymeans@...>
wrote:
>
> I gave a couple of classes this past month at an adult education
school. I contributed to a 10 week program towards a complete
business plan as the accountant. As part of my material I was asked
to discuss the different "entities", sole proprietor, LLC, Corp,
PTRs, etc. I have always felt more comfortable with the Corp and S-
Corp for small businesses. One student said her research concluded
an LLC was best for her. Her reason - simplicity. I advised that
here in NYS the cost to become an LLC doubled with the cost of
running classified ads in 2 newspapers for 13 weeks. For these
startups every nickel and dime matters. After thinking about it it
is less costly if they file as a single member disregarded entity on
Sch C and not having to file an 1120 series return. The tax prep fees
would be considerably less over time. Any thoughts on how you
recommend the best entity for small startups.
>
> Arnie
>

__,_._,___

RE: [taxchat] Bad Client Question

That sounds perfect. I wanted the least troublesome route. I'm not interested in having further friction or whatever.

As a note to Arnie, I DO agree that people can (and do) change for the better. I just don't think that this guy did, and so I feel he is dangerous at best.

Cheers,

JoJo
..............................................................................................................................................................
Music: http://www.myspace.com/jojozjojo * http://www.new.facebook.com/pages/JoJo-Zawawi/16883556821
Blog: http://www.mysteriousperson.com/MYSTERIOUSPERSON/thezblog/

-----Original Message-----
From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com]On Behalf Of Jenkins LawFirm
Sent: Friday, October 24, 2008 12:00 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Bad Client Question

Then just respond briefly, a polite 'thanks but no thanks', I would only say, I'm not able to take on any work from you due to my current workload.

KC Jenkins

On Fri, Oct 24, 2008 at 12:29 PM, JoJo Zawawi <kuchekesha@earthlink.net> wrote:

I definitely won't have him back again -- I'm not talking about just not reporting some income or something. A couple of examples:

1. He ruined something in a truck (something to do with the engine, and which would cost a LOT to fix) and figured out a way to mickey-mouse it so it would look and act perfect temporarily, and then traded it in for a new car, never mentioning the problem.

2. He was employing one of his relatives, but the paycheck was going to another one of his relatives who does not work for him (who had much lower income), to aviod relative # 1 having any tax liability.

There was more. I really do not trust this guy. He is shady, shifty and shiftless. Or something like that. I consider him dangerous, especially these days with extra IRS scrutiny and fines and so on !

I think I'll go with the "My practice has changed and I'm not taking on clients right now" approach.

Thanks, all !

Cheers,

JoJo

..............................................................................................................................................................
Music: http://www.myspace.com/jojozjojo * http://www.new.facebook.com/pages/JoJo-Zawawi/16883556821
Blog: http://www.mysteriousperson.com/MYSTERIOUSPERSON/thezblog/

-----Original Message-----
From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com]On Behalf Of Chuck Warman
Sent: Friday, October 24, 2008 9:56 AM

To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Bad Client Question

I agree with Kate...."illegal" is the operative word here. In fact, I'd go a little farther, telling him that you're glad that you can be on friendly terms now, but that it would probably not be in the best interest of either of you to take on his work again.

Suppose you hire a babysitter, and her boyfriend comes over and smacks your kid around. You can forgive her, and ultimately you can even have a friendly relationship. But are you going to let her babysit your kid again?

Chuck Warman, CPA
Wichita Falls, TX
-------------------------------

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Kate M Coyne
Sent: Friday, October 24, 2008 9:45 AM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Bad Client Question

Arnie,

I would normally be with you on this except JoJo's comment "I started to find out that he was doing this and that illegal stuff". Get away from this guy. Remember what your Mother said? If you hang around with the wrong crowd people will think you are doing the same things they do. I would not put my reputation on the line, it's worth more than the income.

Kate

----- Original Message -----

From: Arnold M. Socol

To: taxchat@yahoogroups.com

Sent: Friday, October 24, 2008 9:56 AM

Subject: Re: [taxchat] Bad Client Question

I know that most of you will disagree, but hear is my response

I personally would be more open about it. Maybe the X-Rude client has seen the light and now respects the quality of work you have provided. I would give these people the opportunity under "my" rules and see what happens. Quote him a retainer fee in advance for the service politely, including the unpaid balance. If questioned about the advance, the answer is that is my policy whenever there has been any problem in the past. If he accepts, you have only gained. If he declines, then no loss. Your loss is not being more open to the opportunity of new business, especially during what may be an extended down turn in the economy. Just check today's stock market - its "limit down" circuit breakers have been triggered. As a financial advisor I have thoughts on that topic as well.

Arnie

----- Original Message -----

From: Kate M Coyne

To: taxchat@yahoogroups.com

Sent: 10/24/2008 9:38 AM

Subject: Re: [taxchat] Bad Client Question

I would respond (my husband wouldn't even respond) and tell him something to the effect that I am not accepting any additional clients and I am unable to take on any additional work.

Good luck,

Kate

----- Original Message -----

From: JoJo Zawawi

To: taxchat@yahoogroups.com

Sent: Thursday, October 23, 2008 11:10 PM

Subject: [taxchat] Bad Client Question

About 1-1/2 years ago, I had a bookkeeping / tax client that was a total pain in the behind, and as we got to know each other better, I started to find out that he was doing this and that illegal stuff, and I wanted no part of it. It worked out at that time that I did not have to fire him, because he fired me after I prepared his tax return and charged him tax prep rates, not bookkeeping rates. He stiffed me about $ 200 on the bill (paid bookkeeping rates for the time spent) and was very, very rude, and even threatened me that "his new bookkeeper will probably find lots of mistakes and he will bill me for it all", etc. Needless to say, I never heard back from him.

Today he sent me an e-mail, apologizing and asking me for advice regarding his business partner. (What advice, I don't know. And hello, I'm not a lawyer !)

Of course, I want no part of him.

The question: Do I respond politely, telling him I am busy ? Or do I not even respond ?

Cheers,

JoJo
..............................................................................................................................................................
Music: http://www.myspace.com/jojozjojo * http://www.new.facebook.com/pages/JoJo-Zawawi/16883556821
Blog: http://www.mysteriousperson.com/MYSTERIOUSPERSON/thezblog/

__,_._,___

Re: [taxchat] Re: LLC or S or C-Corp

I don't know about your state but in most states the Corporate Division operates separately from the tax or revenue Division. In AZ the Corporate Commission wishes you would dissolve your LLC and initiate a Corporation whenever you elect to be an S or C, but it can't force you to. In AZ an LLC files Articles of Organization and has no future documents while a Corp files Articles of Incorporation and have to file an Annual Report which requires a payment when processed.

On Fri, Oct 24, 2008 at 9:13 AM, Arnold M. Socol <waymeans@verizon.net> wrote:

The equipment were already in the owner's name, actually mostly vehicles, earth moving equipment and the insurance and registrations, so we kept everything in the owner's name, but not the operating company which we went to the SO-Corp.

I'm not sure why one would choose an LLC and be taxed as an SO-Corp. Wouldn't that be two registrations with the State? How does that work. Wouldn't the LLC have to file a State Corp return and wouldn't the state require Incorporation? I know every state is different - but just in general. I realize the Feds will accept.

Arnie

----- Original Message -----

From: Robert Lukey

To: taxchat@yahoogroups.com

Sent: 10/24/2008 11:56 AM

Subject: Re: [taxchat] Re: LLC or S or C-Corp

Great advise, or better yet setting an LLC up to own the equipment and rent it so there is no personal liability related to the equipment.

On Fri, Oct 24, 2008 at 8:43 AM, Arnold M. Socol <waymeans@verizon.net> wrote:

I always advise being concerned with the "Liability" first and not the cost, and not the taxes. Obviously the sole proprietor is the easiest and least expensive to setup and maintain, but not good advise for most situations especially where the owner has personal assets that could be needlessly lost in a business law suit. Even when a sole proprietor is ready to accept "limited liability" is the way to go, I keep the assets in the personal name and charge the corp or LLC rent for these assets. Such as a part time landscaper, excavator with nearly $200,000 of equipment/vehicles and less than $50,000 of annual revenues, because he has a full time job with the town. We file a Sch E for the $200k of equipment / vehicles to capture the depreciation expense. We set up an S-Corp that owns nothing and can't lose what it doesn't have and of course there is insurance.

A sole proprietorship I advise is only a temporary stop until the new business can afford and knows it will stay in business for some time to come. I never advise SPs, only as a temporary situations. I explain all of this to the client.

Arnie

----- Original Message -----

From: mjsanders2

To: taxchat@yahoogroups.com

Sent: 10/24/2008 11:22 AM

Subject: [taxchat] Re: LLC or S or C-Corp

Dear Arnie,
In Oklahoma we don't have the same requirement as NYS. I advise new
small businesses to either stay a sole proprietor (based on size) or
go to an LLC with S-Corp election. I was told in a meeting that S-
Corps have to do all the annual meetings, corporate meeting minutes,
etc that C-Corps do. But an LLC does not have that requirement.
Therefore an LLC with S-Corp election gets the preferential tax
treatment without all the required meetings and minutes recording.
The small businesses I have encountered want to operate decision
making wise like a sole proprietor - "I decide". They aren't
interested in having a corporate board of directors or annual
meetings. If they are just an S-Corp, it leaves them open for the IRS
to disallow their S-Corp status on the basis of not having the
corporate board of directors, meetings, etc.
Janet

--- In taxchat@yahoogroups.com, "Arnold M. Socol" <waymeans@...>

wrote:
>
> I gave a couple of classes this past month at an adult education
school. I contributed to a 10 week program towards a complete
business plan as the accountant. As part of my material I was asked
to discuss the different "entities", sole proprietor, LLC, Corp,
PTRs, etc. I have always felt more comfortable with the Corp and S-
Corp for small businesses. One student said her research concluded
an LLC was best for her. Her reason - simplicity. I advised that
here in NYS the cost to become an LLC doubled with the cost of
running classified ads in 2 newspapers for 13 weeks. For these
startups every nickel and dime matters. After thinking about it it
is less costly if they file as a single member disregarded entity on
Sch C and not having to file an 1120 series return. The tax prep fees
would be considerably less over time. Any thoughts on how you
recommend the best entity for small startups.
>
> Arnie
>

-- __._,_.___

IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.

__,_._,___

Re: [taxchat] Fighting Paralegal Client

No problem, sounds like a good plan to me, if you are sure you want to fight this battle. Certainly his letter would be no defense in court, since he already knows what you did for him, and he had his copy of the original agreement, etc.

KC Jenkins

On Fri, Oct 24, 2008 at 9:14 AM, Michael Clark <taxfocus@earthlink.net> wrote:

I did about 4 months worth of bookeeping for a paralegal. He provided
me with a password and code giving me access to his Quickbooks Online
account. Mainly I entered his tranasctions checks/deposits and
invoices and provided him with financials. He would send me copies of
invoices he generated on Excel, which I usually found numerous
footing errors in his calculations so he was in dire need of someone
to check his math. Long story short, he pays me for the first month
and stiffs me on the next three. After stopping the work and sending
him numerous billing reminders, phone calls (where I would get a hard
luck story), I gave up. One day I see this guy walking out of a fancy
restaurant and it really got to me. So then I went into Quickbooks
and used one of their standard harsh collection billing letters and
sent it to him certified. He sends me back a certified letter saying
he owes me nothing and I need to send him copies of whatever I
supposedly did for him that justifys the billing. I'm through playing
games with this guy and would just as soon take him to small claims
court, as opposed to wasting more time, copies, and postage. I do
have copies of every financial statement, a copy of a bookeeping
agreement form that is signed by him stating my monthly fee, and I
have a copy of several of his faxes of his cutomers invoices he
generated and asked me to enter into his accounting package. I could
send him copies of all of this, but like a good poker player I don't
want him to see my hand. Would I be at any risk if I disreagrded his
request and just went ahead and filed with small claims court?

__,_._,___

Re: [taxchat] Bad Client Question

Then just respond briefly, a polite 'thanks but no thanks', I would only say, I'm not able to take on any work from you due to my current workload.

KC Jenkins

On Fri, Oct 24, 2008 at 12:29 PM, JoJo Zawawi <kuchekesha@earthlink.net> wrote:

I definitely won't have him back again -- I'm not talking about just not reporting some income or something. A couple of examples:

1. He ruined something in a truck (something to do with the engine, and which would cost a LOT to fix) and figured out a way to mickey-mouse it so it would look and act perfect temporarily, and then traded it in for a new car, never mentioning the problem.

2. He was employing one of his relatives, but the paycheck was going to another one of his relatives who does not work for him (who had much lower income), to aviod relative # 1 having any tax liability.

There was more. I really do not trust this guy. He is shady, shifty and shiftless. Or something like that. I consider him dangerous, especially these days with extra IRS scrutiny and fines and so on !

I think I'll go with the "My practice has changed and I'm not taking on clients right now" approach.

Thanks, all !

Cheers,

JoJo

..............................................................................................................................................................
Music: http://www.myspace.com/jojozjojo * http://www.new.facebook.com/pages/JoJo-Zawawi/16883556821
Blog: http://www.mysteriousperson.com/MYSTERIOUSPERSON/thezblog/

-----Original Message-----
From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com]On Behalf Of Chuck Warman
Sent: Friday, October 24, 2008 9:56 AM

To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Bad Client Question

I agree with Kate...."illegal" is the operative word here. In fact, I'd go a little farther, telling him that you're glad that you can be on friendly terms now, but that it would probably not be in the best interest of either of you to take on his work again.

Suppose you hire a babysitter, and her boyfriend comes over and smacks your kid around. You can forgive her, and ultimately you can even have a friendly relationship. But are you going to let her babysit your kid again?

Chuck Warman, CPA
Wichita Falls, TX
-------------------------------

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Kate M Coyne
Sent: Friday, October 24, 2008 9:45 AM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Bad Client Question

Arnie,

I would normally be with you on this except JoJo's comment "I started to find out that he was doing this and that illegal stuff". Get away from this guy. Remember what your Mother said? If you hang around with the wrong crowd people will think you are doing the same things they do. I would not put my reputation on the line, it's worth more than the income.

Kate

----- Original Message -----

From: Arnold M. Socol

To: taxchat@yahoogroups.com

Sent: Friday, October 24, 2008 9:56 AM

Subject: Re: [taxchat] Bad Client Question

I know that most of you will disagree, but hear is my response

I personally would be more open about it. Maybe the X-Rude client has seen the light and now respects the quality of work you have provided. I would give these people the opportunity under "my" rules and see what happens. Quote him a retainer fee in advance for the service politely, including the unpaid balance. If questioned about the advance, the answer is that is my policy whenever there has been any problem in the past. If he accepts, you have only gained. If he declines, then no loss. Your loss is not being more open to the opportunity of new business, especially during what may be an extended down turn in the economy. Just check today's stock market - its "limit down" circuit breakers have been triggered. As a financial advisor I have thoughts on that topic as well.

Arnie

----- Original Message -----

From: Kate M Coyne

To: taxchat@yahoogroups.com

Sent: 10/24/2008 9:38 AM

Subject: Re: [taxchat] Bad Client Question

I would respond (my husband wouldn't even respond) and tell him something to the effect that I am not accepting any additional clients and I am unable to take on any additional work.

Good luck,

Kate

----- Original Message -----

From: JoJo Zawawi

To: taxchat@yahoogroups.com

Sent: Thursday, October 23, 2008 11:10 PM

Subject: [taxchat] Bad Client Question

About 1-1/2 years ago, I had a bookkeeping / tax client that was a total pain in the behind, and as we got to know each other better, I started to find out that he was doing this and that illegal stuff, and I wanted no part of it. It worked out at that time that I did not have to fire him, because he fired me after I prepared his tax return and charged him tax prep rates, not bookkeeping rates. He stiffed me about $ 200 on the bill (paid bookkeeping rates for the time spent) and was very, very rude, and even threatened me that "his new bookkeeper will probably find lots of mistakes and he will bill me for it all", etc. Needless to say, I never heard back from him.

Today he sent me an e-mail, apologizing and asking me for advice regarding his business partner. (What advice, I don't know. And hello, I'm not a lawyer !)

Of course, I want no part of him.

The question: Do I respond politely, telling him I am busy ? Or do I not even respond ?

Cheers,

JoJo
..............................................................................................................................................................
Music: http://www.myspace.com/jojozjojo * http://www.new.facebook.com/pages/JoJo-Zawawi/16883556821
Blog: http://www.mysteriousperson.com/MYSTERIOUSPERSON/thezblog/

__,_._,___

Re: [taxchat] Re: LLC or S or C-Corp

"We file a Sch E for the $200K of equipment / vehicles to capture the depreciation expense."

I thought that revenue from rental of personal property (equipment) goes to Sch C, not E, and is subject to SE tax. Is that not true?

Anyway, here in the Land of Oz, it costs $165 to set up an LLC with the SOS, and a one-page annual report is filed, along with a $55 annual fee. It's pretty simple and not very expensive. I just explain that I'm not an attorney, but I can tell them the tax ramifications of each type of entity. I think that if they are concerned about liability, and don't want to deal with the requirements involved in maintaining an S-Corp, such as minutes, payroll, and a separate tax return, the LLC is fine.

A problem that we constantly face in this area is that there are all these radio and TV ads telling them that they should incorporate, and if they don't incorporate they are paying way too much in taxes. I have to explain to them the rules on reasonable salary, and that they can't get away without paying any SE tax. In the case of a one-owner business with no employees, and all the revenue is a result of that owner's work, they're going to have a tough time convincing the IRS that the revenue isn't earned income. And even if they pay themselves a reasonable salary and save a little SE tax on part of the income, the cost of doing the payroll and the corporate tax return will probably be as much as they saved in SE tax, if not more. But, since they've heard these commercials, and their ex-brother-in-law's father has a neighbor whose barber's son said so, they're convinced that we're not telling them the truth. You know that book "101 Tax Saving Tips That Your Accountant Doesn't Want You to Know" or something like that...as if we wouldn't want to save them money in taxes for some reason.

It also depends a lot on the client, what type of business it is, whether or not they'll have employees, how organized they are, etc. Some people can't handle the extra paperwork, but don't want to pay someone to take care of it for them. Those are also the ones that are less likely to make enough money for it to be worthwhile to incorporate. JMHO.

From: Arnold M. Socol

Sent: Friday, October 24, 2008 10:43 AM

To: taxchat@yahoogroups.com

Subject: Re: [taxchat] Re: LLC or S or C-Corp

I always advise being concerned with the "Liability" first and not the cost, and not the taxes. Obviously the sole proprietor is the easiest and least expensive to setup and maintain, but not good advise for most situations especially where the owner has personal assets that could be needlessly lost in a business law suit. Even when a sole proprietor is ready to accept "limited liability" is the way to go, I keep the assets in the personal name and charge the corp or LLC rent for these assets. Such as a part time landscaper, excavator with nearly $200,000 of equipment/vehicles and less than $50,000 of annual revenues, because he has a full time job with the town. We file a Sch E for the $200k of equipment / vehicles to capture the depreciation expense. We set up an S-Corp that owns nothing and can't lose what it doesn't have and of course there is insurance.

A sole proprietorship I advise is only a temporary stop until the new business can afford and knows it will stay in business for some time to come. I never advise SPs, only as a temporary situations. I explain all of this to the client.

Arnie

----- Original Message -----

From: mjsanders2

To: taxchat@yahoogroups.com

Sent: 10/24/2008 11:22 AM

Subject: [taxchat] Re: LLC or S or C-Corp

Dear Arnie,
In Oklahoma we don't have the same requirement as NYS. I advise new
small businesses to either stay a sole proprietor (based on size) or
go to an LLC with S-Corp election. I was told in a meeting that S-
Corps have to do all the annual meetings, corporate meeting minutes,
etc that C-Corps do. But an LLC does not have that requirement.
Therefore an LLC with S-Corp election gets the preferential tax
treatment without all the required meetings and minutes recording.
The small businesses I have encountered want to operate decision
making wise like a sole proprietor - "I decide". They aren't
interested in having a corporate board of directors or annual
meetings. If they are just an S-Corp, it leaves them open for the IRS
to disallow their S-Corp status on the basis of not having the
corporate board of directors, meetings, etc.
Janet

--- In taxchat@yahoogroups.com, "Arnold M. Socol" <waymeans@...>
wrote:
>
> I gave a couple of classes this past month at an adult education
school. I contributed to a 10 week program towards a complete
business plan as the accountant. As part of my material I was asked
to discuss the different "entities", sole proprietor, LLC, Corp,
PTRs, etc. I have always felt more comfortable with the Corp and S-
Corp for small businesses. One student said her research concluded
an LLC was best for her. Her reason - simplicity. I advised that
here in NYS the cost to become an LLC doubled with the cost of
running classified ads in 2 newspapers for 13 weeks. For these
startups every nickel and dime matters. After thinking about it it
is less costly if they file as a single member disregarded entity on
Sch C and not having to file an 1120 series return. The tax prep fees
would be considerably less over time. Any thoughts on how you
recommend the best entity for small startups.
>
> Arnie
>

__,_._,___

RE: [taxchat] Bad Client Question

I definitely won't have him back again -- I'm not talking about just not reporting some income or something. A couple of examples:

1. He ruined something in a truck (something to do with the engine, and which would cost a LOT to fix) and figured out a way to mickey-mouse it so it would look and act perfect temporarily, and then traded it in for a new car, never mentioning the problem.

2. He was employing one of his relatives, but the paycheck was going to another one of his relatives who does not work for him (who had much lower income), to aviod relative # 1 having any tax liability.

There was more. I really do not trust this guy. He is shady, shifty and shiftless. Or something like that. I consider him dangerous, especially these days with extra IRS scrutiny and fines and so on !

I think I'll go with the "My practice has changed and I'm not taking on clients right now" approach.

Thanks, all !

Cheers,

JoJo

..............................................................................................................................................................
Music: http://www.myspace.com/jojozjojo * http://www.new.facebook.com/pages/JoJo-Zawawi/16883556821
Blog: http://www.mysteriousperson.com/MYSTERIOUSPERSON/thezblog/

-----Original Message-----
From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com]On Behalf Of Chuck Warman
Sent: Friday, October 24, 2008 9:56 AM
To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Bad Client Question

I agree with Kate....“illegal” is the operative word here. In fact, I’d go a little farther, telling him that you’re glad that you can be on friendly terms now, but that it would probably not be in the best interest of either of you to take on his work again.

Suppose you hire a babysitter, and her boyfriend comes over and smacks your kid around. You can forgive her, and ultimately you can even have a friendly relationship. But are you going to let her babysit your kid again?

Chuck Warman, CPA
Wichita Falls, TX
-------------------------------

From: taxchat@yahoogroups.com [mailto:taxchat@yahoogroups.com] On Behalf Of Kate M Coyne
Sent: Friday, October 24, 2008 9:45 AM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Bad Client Question

Arnie,

I would normally be with you on this except JoJo's comment "I started to find out that he was doing this and that illegal stuff". Get away from this guy. Remember what your Mother said? If you hang around with the wrong crowd people will think you are doing the same things they do. I would not put my reputation on the line, it's worth more than the income.

Kate

----- Original Message -----

From: Arnold M. Socol

To: taxchat@yahoogroups.com

Sent: Friday, October 24, 2008 9:56 AM

Subject: Re: [taxchat] Bad Client Question

I know that most of you will disagree, but hear is my response

I personally would be more open about it. Maybe the X-Rude client has seen the light and now respects the quality of work you have provided. I would give these people the opportunity under "my" rules and see what happens. Quote him a retainer fee in advance for the service politely, including the unpaid balance. If questioned about the advance, the answer is that is my policy whenever there has been any problem in the past. If he accepts, you have only gained. If he declines, then no loss. Your loss is not being more open to the opportunity of new business, especially during what may be an extended down turn in the economy. Just check today's stock market - its "limit down" circuit breakers have been triggered. As a financial advisor I have thoughts on that topic as well.

Arnie

----- Original Message -----

From: Kate M Coyne

To: taxchat@yahoogroups.com

Sent: 10/24/2008 9:38 AM

Subject: Re: [taxchat] Bad Client Question

I would respond (my husband wouldn't even respond) and tell him something to the effect that I am not accepting any additional clients and I am unable to take on any additional work.

Good luck,

Kate

----- Original Message -----

From: JoJo Zawawi

To: taxchat@yahoogroups.com

Sent: Thursday, October 23, 2008 11:10 PM

Subject: [taxchat] Bad Client Question

About 1-1/2 years ago, I had a bookkeeping / tax client that was a total pain in the behind, and as we got to know each other better, I started to find out that he was doing this and that illegal stuff, and I wanted no part of it. It worked out at that time that I did not have to fire him, because he fired me after I prepared his tax return and charged him tax prep rates, not bookkeeping rates. He stiffed me about $ 200 on the bill (paid bookkeeping rates for the time spent) and was very, very rude, and even threatened me that "his new bookkeeper will probably find lots of mistakes and he will bill me for it all", etc. Needless to say, I never heard back from him.

Today he sent me an e-mail, apologizing and asking me for advice regarding his business partner. (What advice, I don't know. And hello, I'm not a lawyer !)

Of course, I want no part of him.

The question: Do I respond politely, telling him I am busy ? Or do I not even respond ?

Cheers,

JoJo
..............................................................................................................................................................
Music: http://www.myspace.com/jojozjojo * http://www.new.facebook.com/pages/JoJo-Zawawi/16883556821
Blog: http://www.mysteriousperson.com/MYSTERIOUSPERSON/thezblog/

__,_._,___

24 Oktober 2008

Arsip Blog